What is Solana?
Solana is a project developing a scaleable blockchain protocol for creating decentralized applications and smart contracts. Let’s take a look at Solana’s history and understand how it works.
Who created Solana and when?
Solana’s founders are former Qualcomm employee Anatoly Yakovenko, former BREW developer Greg Fitzgerald, and Eric Williams, Ph.D. in Physics.
In 2017, Yakovenko published a draft white paper presenting a Proof-of-History (PoH) blockchain synchronization algorithm. Later, Yakovenko and Fitzgerald created a blockchain in the Rust programming language that uses PoH as an “internal clock”. In February 2018, they published the official white paper of the project and launched the first internal test network.
In 2018, Yakovenko and Fitzgerald founded a company now known as Solana Labs. The project team includes former programmers from Google, Microsoft, Qualcomm, Apple, Intel, and Dropbox. The original name of the project was Loom. But to avoid confusion with the Layer 2 solution, Loom Network, it was renamed. The project was named after Solana Beach, a town thirty minutes from San Diego where Anatoly Yakovenko lives.
Between April 2018 and July 2019, the project raised more than $20 million in venture capital investment through several closed token sales. In the third quarter of 2020, developers opened the public test network of the Tour de SOL project. In March 2020, they launched a beta version of the main network.
In June 2020, project makers launched Solana Foundation, an organization to develop the Solana ecosystem and adopt decentralized technologies. Solana Labs transferred 167 million SOL tokens and the rights to all intellectual property to the Solana Foundation.
How does Solana work?
Solana aims for a decentralized network of nodes to match the given characteristics of a single node. To do so, the interaction of the nodes must be optimized. Solana solves this problem using eight key technologies. Let’s take a look at each of them.
Technology #1. Proof of History blockchain synchronization algorithm
Node synchronization is one of the main problems in cryptocurrency because the speed of synchronization impacts the throughput of the blockchain. The faster it is, the more transactions per second the network processes.
To use time synchronization, you need a clock. Cryptocurrencies have their clock and internal time. This is a timestamp. There is no central clock to check, so it’s not accurate. This synchronization is not ideal: if you focus on timestamp, a new block may appear before the previous one.
The Proof of History (PoH) protocol is not a consensus mechanism, but a way to optimize the time required to confirm a transaction. It is used in combination with Proof-of-Stake.
It is a decentralized clock that solves the synchronization problem. PoH allows you to create a chronological record confirming that an event occurred at a specific point in time. PoH is a high-frequency Verifiable Delay Function (VDF). It requires estimating a certain number of sequential steps but produces a unique output that can be publicly verified.
Other blockchains require communication between validators, who must agree that time has passed. Solana requires validators to maintain their clock by constantly solving a VDF based on the SHA-256 hash function. Their choice is scheduled in advance for the entire cycle, which lasts for thousands of blocks. The validator is rewarded for the work done.
Proof of History ensures uninterrupted network operation due to automatic rotation, without the involvement of validators. PoH also allows Solana to optimize block creation time, block reproduction, bandwidth, and registry storage.
➜ SHA-256 closes as quickly as possible. Each output serves as the next input.
➜ Circuit samples, number of iterations, and state are recorded.
The recorded samples represent the elapsed time encoded as a verifiable data structure. The chain can also be used to record events.
➜A message that references any sample is guaranteed to be created after the sample is created.
➜ Messages can be chained and hashed along with the state, ensuring that the message is created before the next insertion.
This data structure guarantees precise timing and sequence of events.
Technology #2. Tower BFT
The Tower BFT is an implementation of the Practical Byzantine Fault Tolerance (PBFT) algorithm. To achieve consensus, Tower BFT uses PoH as a clock, which reduces computational resources and latency.
Technology #3. Turbine
The Turbine transaction protocol solves the blockchain scalability trilemma similar to BitTorrent. Most blockchains have a fixed node bandwidth. The bigger the number of nodes, the longer it takes to transfer data to each node. Turbine solves this problem by transmitting data via User Datagram Protocol (UDP). Each packet of user data is sent by a randomly chosen path.
As an example, for a 128 MB block, the leader creates 2,000 64 KB packets and then sends them to different validators. They forward the packets to a new group of validators closest to them (called the neighborhood in Solana). Thus, each neighborhood of 200 nodes through a Layer 3 network increases the number of members to 40,000 validators in about 200 ms.
Technology #4. Gulf Stream
The Gulf Stream is a protocol for transmitting transactions without using Mempool, due to the advanced detection of validators. Each Solana validator knows the order of future leader changes, so it can send transactions to the expected leader in advance. This allows you to execute transactions early, thereby reducing confirmation time, changing leaders faster, and reducing memory pressure on validators from the pool of unconfirmed transactions.
Technology #5. Sealevel
The Sealevel virtual machine processes transactions, which are horizontally scaled on GPUs and SSDs, in parallel. Most other blockchains are single-threaded. Solana supports parallel transaction execution and signature verification in a single shard. This is possible due to the scatter-gather operating system driver technique.
Transactions tell beforehand which state they will read and write during execution. Sealevel finds non-overlapping transactions in a block and schedules their execution. The execution process is handled by hardware using native Berkeley Packet Filter (BPF) byte code.
Technology #6. Pipeline
The pipeline is a Transaction Processing Unit (TPU) used to optimize the validation process. Solana blockchain transaction validation process uses pipelining. It is effective in a model with a stream of incoming data processed in series. A specific piece of hardware is responsible for the operations at each stage.
Pipeline collects data at the kernel level, verifies data at the GPU level, banks it at the CPU level, and writes it at the kernel level.
When Pipeline sends blocks to validators, it accesses the next set of packets, verifies their signatures, and proceeds to accrue tokens. Parallel processing at the GPU level enables the Solana TPU to perform at a high-performance level.
Technology #7. Cloudbreak
The Cloudbreak is a horizontally scalable account database. It allows you to optimize reads and writes to SSDs in parallel. Each additional disk increases the storage capacity available to on-chain programs, and increases the number of parallel reads and writes.
This allows us to prefetch accounts from the disk and prepare the environment to execute transactions. Nodes can start executing transactions before they are encoded into a block. This reduces block mining time and execution delays.
Technology #8. Archivers
The Archivers is a distributed ledger repository. Storing data in a high-performance network requires centralization. If the cost of storage is high, only users with significant resources can act as validators and participate in the consensus process. In Solana, data storage is not handled by validators, but by a network of nodes called archivers.
Storing data in a high-performance network requires centralization. If the cost of data storage is high, then only users with significant resources can act as validators and participate in the consensus process. In Solana, data storage is not handled by validators, but by a network of nodes called archivers.
What consensus mechanism does Solana use?
Tower BFT, a Proof-of-Stake consensus mechanism, uses Proof-of-History as a clock, reducing bandwidth loss and data latency.
When a validator votes for a particular fork, the vote is limited to a fixed period of hashes called a slot. The duration of a slot is approximately 400 ms. Every 400 ms a potential restart point is created. Each subsequent vote doubles the time interval that must pass before the network can block that vote. Additional voting makes it difficult to undo transactions running in a particular slot.
So a block with a few votes has a better chance of remaining part of the network. For example, each validator has voted 32 times in the last 12 seconds. The vote that took place 12 seconds ago has a timeout of two to the power of thirty-two of a slot. That’s approximately 54 years. Consequently, the network will never cancel that vote.
At the same time, the most recent vote has a timeout of two slots. This is about 800 ms. As blocks are added to the registry, the chances of confirming old blocks increase. This is because the number of old slot votes doubles each slot.
Finalization occurs after two-thirds of the validators have voted for a particular sequence of events. Once finalized, transactions can’t be reversed.
Token holders can participate in the block production process as stackers and validators, and be rewarded for doing so. They also can delegate tokens to trusted validators.
There is no minimum for tokens to be staked. The right to choose the leader, the validator offering the next block, depends on the number of tokens in the stack.
What role does the SOL token play in the Solana ecosystem?
SOL is the native utility token of the Solana blockchain. SOL uses SPL, a token standard in the Solana blockchain, similar to the ERC-20 standard in the Ethereum blockchain.
The SOL token’s share is called a lamport, after American computer scientist Leslie Lamport, whose research laid the foundation for the theory of distributed systems. One lamport equals 0.0000000000582 SOL.
There are three ways for using SOLs:
- Stacking;
- Transaction fees;
- Management.
Solana’s deflationary model involves burning SOL tokens.
SOL tokens can be stored in sollet.io, developed by Serum Academy, in Trust Wallet for mobile devices, and in other wallets that support the SPL standard. Some wallets support token stacking, e.g., SolFlare.
How is Solana evolving?
In August 2020, the decentralized exchange Serum started operating on the Solana blockchain. The Serum uses Optimistic Rollup, a Layer 2 solution for Ethereum. It will be used to implement cross-chain swaps and tokenization.
In October 2020, the Solana project introduced the Wormhole cross-chain solution, connecting tokens from Ethereum and Solana networks.
In May 2021, the Solana Foundation launched five funds with combined assets of $100 million to develop applications in China. It was helped by Huobi, Gate.io and NGC Ventures, MATH Global Foundation, and Hash Key.
In the same month, the project raised $60 million from Hacken, Gate.io, Coin DCX, and BRZ. The funds will go to three funds focused on ecosystem expansion in Ukraine, India, Brazil, and Russia. The funding will be used to support the development of blockchain applications in DeFi, NFT, and cybersecurity.
In June 2021, Solana Labs raised $314 million in a closed token sale. The round was led by venture capital firms Andreessen Horowitz (a16z) and Polychain Capital, with Alameda Research, CMS Holdings, CoinShares, Jump Trading, Multicoin Capital, Sino Global Capital, and others. Solana Labs will use the funds raised to create a venture capital unit to invest in its ecosystem and launch a studio to develop Solana-based projects.
